Table Of Contenti
THE CODE ECONOMY
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THE CODE
ECONOMY
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A FORTY-T HOUSAND-Y EAR HISTORY
PHILIP E. AUERSWALD
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Library of Congress Cataloging-i n- Publication Data
Names: Auerswald, Philip E., author.
Title: The code economy : a forty-thousand-year history / Philip E. Auerswald.
Description: New York, NY : Oxford University Press, [2017]
Identifiers: LCCN 2016017260 | ISBN 9780190226763 (hardcover) | ISBN 9780190226787 (epub)
Subjects: LCSH: Information technology—Economic aspects. | Economics.
Classification: LCC HC79.I55 A896 2017 | DDC 303.48/3309—dc23 LC record available
at https://lccn.loc.gov/2016017260
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contents
Introduction: Technology = Recipes 1
Part one: the advance of c ode
1. Jobs: Divide and Coordinate 13
2. Code: “This Is the Procedure” 25
3. Machines: “The Universal Character” 36
4. Computers: Predicting the Weather 50
Part two: code economics
5. Substitution: The Great Man- vs- Machine Debate 65
6. Information: “Reliable Circuits Using Crummy Relays” 87
7. Learning: The Dividend of Doing 99
8. Evolution: The Code of Life 115
9. Platforms: The Role of Standards in Enabling
Increased Complexity 129
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Part three: the human advantage
10. Complementarity: The Bifurcation Is Near 151
11. Education: The Game of Life 168
12. Equity: Progress and Poverty 180
13. Authenticity: Creating the Foundation for Reputation 202
14. Purpose: The Promised Sand 216
Conclusion: Identity: A Copernican Moment 235
Acknowledgments 239
Notes 243
References 271
Index 283
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introduction
Technology = Recipes
The ingredients for bread were always the same: flour, yeast, water, and
salt. But the difficulty was that there were ten thousand ways of combining
these simple elements. Every little detail was important, we learned: the
freshness of the yeast, the type of flour, the time of rising, the way one
kneaded the dough, the amount of heat and moisture in the oven, even
the weather.
— Julia Child, My Life in France, 2006
the code economy describes the evolution of human productive
activity from simplicity to complexity over the span of more than
40,000 years. I call this evolutionary process the advance of code.
Our modern conception of code—p rograms run on digital
computers— is just the latest incarnation; code is in fact much older.
How, one might ask, have we humans managed to get where we are
today despite our abundant failings, including wars, famines, and a
demonstrably meager capacity for society- wide planning and coordina-
tion? We have survived, and thrived, by developing productive activities
that evolve into regular routines and standardized platforms— which is
to say we have survived, and thrived, by creating and advancing code.
How is this process evolutionary? In the economy, raw materials
are like diatoms, amoebas, or plankton in the biological food chain,
whereas standardized platforms are like complex multicellular organ-
isms. As code advances, higher- level technologies feed on more funda-
mental technologies in much the same way more complex organisms
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2 The Code Economy
feed on simpler organisms in the food chain. Platforms provide essen-
tial structures for the code economy: The infrastructure that underlies
a city is a standardized platform. Written language is a standardized
platform. The Internet is a standardized platform.
Human civilization has thus advanced through the creation and im-
provement of code, which is built on layers of platforms that accumu-
late like the pipes and tunnels that lie below a great city.
The microeconomics you learned in college was generally limited to
the “what” of production: what goes in and what comes out. This book
is about the “how”: how inputs are combined to yield outputs. In other
words, it is about how ideas become things.
Here’s an example.
You are baking chocolate chip cookies. You have arrayed before you
the required ingredients: 1 cup of butter, 1 cup of white sugar, 1 cup
of brown sugar, 2 eggs, 1 teaspoon of baking soda, 2 teaspoons of hot
water, 1/ 2 teaspoon of salt, and (importantly) 2 cups of chocolate chips.
These items, 30 minutes of your own labor, and access to the oven,
bowls, and other durable equipment you employ constitute the inputs
into your production process. The work will yield 24 servings of two
cookies each, which constitute your output.
From the perspective of standard microeconomic theory, we have
fully described the production of chocolate chip cookies: capital,
labor, and raw material inputs combine to yield an output. However,
as is obvious to even the least experienced baker, simply listing ingre-
dients and stating the output does not constitute a complete recipe.
Something important is missing: the directions— how you make the
cookies.
The “how” goes by many names: recipes, processes, routines, algo-
rithms, and programs, among others. While I will employ each of these
names at different points in this book, I use the word “code” through-
out to refer to the how of production.
The essential idea is that the “what” of output cannot exist without
the “how” by which it is produced. In other words, production is not
possible without process. These processes evolve according to both their
own logic and the path of human decision-m aking. This has always
been true: the economy has always been at least as much about the
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Introduction 3
evolution of code as about the choice of inputs and the consumption
of output. Code economics is as old as the first recipe and the earliest
systematically produced tool, and it is as integral to the unfolding of
human history as every king, queen, general, prime minister, and pres-
ident combined.
We cannot understand the dynamics of the economy— its past or its
future— without understanding code.
The word “code” derives from the Latin codex, meaning “a system of
laws.” Today code is used in various distinct contexts— computer code,
genetic code, cryptologic code (i.e., ciphers such as Morse code), eth-
ical code, building code, and so forth— each of which has a common
feature: it contains instructions that require a process in order to reach
its intended end. Computer code requires the action of a compiler,
energy, and (usually) inputs in order to become a useful program.
Genetic code requires expression through the selective action of en-
zymes to produce proteins or RNA, ultimately producing a unique
phenotype. Cryptologic code requires decryption in order to be con-
verted into a usable message. Ethical codes, legal codes, and building
codes all require processes of interpretation in order to be converted
into action.
Code can include instructions we follow consciously and purposively,
and those we follow unconsciously and intuitively. Code can be under-
stood tacitly, it can be written, or it can be embedded in hardware.1 Code
can be stored, transmitted, received, and modified. Code captures the
algorithmic nature of instructions as well as their evolutionary character.
As you read this book, you will see that code as I intend it incorpo-
rates elements of computer code, genetic code, cryptologic code, and
other forms as well. But you will also see that it stands alone as its own
concept— the instructions and algorithms that guide production in the
economy—f or which no adequate word yet exists.
To convey the intuitive meaning of the concept I intend to com-
municate with the word “code,” as well as its breadth, I use two spe-
cific and carefully selected words interchangeably with code: recipe and
technology.
My motivation for using “recipe” is evident from the chocolate chip
cookie example I gave above. However, I do not intend the culinary
